Straight Talk from Countrywide Chief: 'There Are No Buyers'
You have to hand it to Countrywide CEO Angelo Mozilo -- in an industry that's as buttoned down as Brooks Brothers, he says what everybody else is thinking. He did it twice today -- first telling Congress and the regulators to back off the mortgage industry, then talking about the buyers' strike he sees in real estate.
First, why he opposes new regulations on the mortgage industry: "It's better for the crooks," Mozilo told Reuters. "It's only the good people who have to comply. Regulation, in my opinion, has caused part of the problem. When they attacked the pay option and interest-only loans, that really put a dent in a lot of the product, which is perfectly good product."
Then, the market as Angelo sees it: "The reason why people can't sell their houses is there are no buyers around," Mozilo said. "And there are no buyers around because they can't get the financing."
Mozilo is just trying to cash out, he wants to retire and the housing market downturn threatened his wealth. So now he is staying on, talking up his company and the market in an attempt to be cash out as much as possible before things go south. Ideally (for him), either fannie/freddie/FHA become the new bag holders so the floodgates can open again (so he can make bad loans and have no risk) or he gets some other company (sucker) to buy his company. Either way he cashes out. This is his complete motivation, he wraps himself in the flag, tells of how he is helping home ownership. But in reality his company is out there putting people into loans they cant afford at a greater rate than any other company. He is cashing in options at the fastest rate he can without spooking investors.
And remember, when he is saying IO and Option Arm is a good product, he means for him, not for joe six pack. IO and Option Arm have their place, when stricly underwritten, that is not what this company is doing. They are offering them as "affordability" products. Complete toxic waste.
Posted by: Cal | May 21, 2007 at 09:56 PM
This guy is Desperate... Trying to cash out what stock positions he has left before the mortgage mess hits high gear..
Posted by: J. R. | May 22, 2007 at 06:16 AM
If you read the SEC releases with his stock sales, these are all scheduled sales. Do you think he can just hit the sell button and not alert the SEC? These have been planned for a while.
I don't think he is desperate, didn't he make like over $50 million last year. I am sure his pay for the last 40 years hasn't been too shabby either.
Posted by: Numbers Guy | May 22, 2007 at 08:26 AM
Mozilo has more money than he can spend, i don't know why you think he's desperate
Posted by: Sam | May 22, 2007 at 02:40 PM
The reason there aren't any buyers is because the houses are over priced.
The entire housing industry caused the problem, so shut up.
Posted by: S M | May 23, 2007 at 04:18 AM